In less than 10 years, spending on marijuana is expected to hit almost $60 billion worldwide. This accounts for both recreational and medical marijuana, and the largest group of buyers is going to be in North America.
This alone should be enough to tell you it’s time to start investing in cannabis. But of course, it’s one thing to see a good opportunity and another to find the ideal investment option for you.
You need to take the time to identify what your best approach to cannabis investing is going to be. It’s worth considering all your options and understanding the different marijuana markets before you start putting your money into a handful of the many companies who operate in this realm.
While this is an extensive process, it doesn’t have to be complicated. Here are the 4 simple steps you need to follow if you’re interested in marijuana investing.
1. Understand All Your Options
The first step to investing in pot stocks is researching the various kinds of marijuana-related opportunities out there. Some people choose to start investing directly in growers, while others consider putting money into app developers or weed resellers as a better investment.
Whatever you decide to do with your money, don’t put it away on a whim. Do your research before you invest a single dollar. These are the main investment opportunities available to you:
Growers and Manufacturers
To invest in marijuana growers means you’re backing the businesses which produce the pot itself. They specialize in producing high-quality flowers and distributing them – either straight to market or to manufacturers.
Manufacturers work with growers to produce unique marijuana items for sale like oils, edibles, lotions, and even household items such as candles. They also produce CBD products in the same form, which are non-THC items that are legal in all 50 states.
There’s a big interest in each of these investment opportunities. Many people see them as the driving force behind the entire marijuana industry. But, there are a few more business owners and innovators pushing the market’s growth forward.
App Developers and Resellers
As important as growers and manufacturers are, they can’t create success on their own. Many consumers in the marijuana market support these businesses through their interactions with marijuana app developers and resellers.
People aren’t often buying directly from growers. Instead, they’re going to the dispensaries and online stores of resellers who work with manufacturers to create premium branded products.
Meanwhile, app developers make the buying cycle easier on both sides. Marijuana apps include tools which help people find and order their products, connect with other entrepreneurs in this industry, and learn more about investing, too.
Companies Who Support the Marijuana Industry
Here’s an interesting thought to consider: instead of investing directly in the marijuana industry, how about starting your marijuana portfolio by backing the companies who make such businesses possible?
Think about all the supplies growers and manufacturers need to get on their feet. Consider all the money that goes into buying the real estate, agricultural systems, distribution products, and for marijuana.
Investing in the suppliers of these products gives you a better understanding of how marijuana works. Not to mention, it’s a bit of a “safer” investment because the suppliers of such goods are usually involved in other industries, too. They have a better likelihood of growth and success, which is good for your pockets.
2. Don’t Invest Everything at Once
No matter what kind of marijuana investment you want to start off with, keep in mind that it’s best to start slow. You don’t want to dump all your money into one company or even one piece of the marijuana industry.
It’s better to dip your feet in little by little. Put a bit of money into two or three companies which interest you and track their stocks for a few weeks.
Then, you can decide if it’s worth investing more in the stocks you already have or if you’d rather hold onto them and begin to expand. You may even decide to sell depending on what happens within that short amount of time.
3. Keep an Eye on Current Events
Part of watching stocks is also watching current events. Remember, marijuana is still becoming legalized in some states and the general understanding of this industry still has a long way to go.
All it takes is one government decision or misinformed piece of news to make your stocks severely drop. On the other hand, an approval of a marijuana legalization bill or some buzz around an up and coming company could do a lot of good for your stocks.
You won’t be able to tell unless you’re watching what’s going on in the market, though. Don’t get so caught up in tracking stocks that you forget to check in with current events and keep an eye out for new players in the market.
The National Institute for Cannabis Investors can help you balance both the investment information you need to track and the marijuana news worth reading.
4. Diversify
The final piece of advice to use when investing in cannabis is to diversify. Once you have a bit of a portfolio going, make an effort to start investing in different kinds of cannabis businesses.
This will enhance your chances of success because it lowers how dependent you are on the success of one business. When you invest in a grower as well as an app developer and a reseller, you’re taking better care of your money. You’re creating a sense of security for yourself and expanding the profits available to you, too.
Investing in Cannabis Made Simple
At the end of the day, investing in cannabis is pretty much like investing in anything else. The main difference is this industry is so new and fast-paced that some people can’t understand it as well as other publicly traded investment opportunities.
Still, it’s worth taking the time to learn about the marijuana market and how it can benefit your bottom line. The next time you’re looking for a new way to diversify the portfolio you already have, don’t overlook everything marijuana can offer you.
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